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Corporate Service - China

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Q&A Regarding Pretax Deduction of Asset Losses in China

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Q: How is the asset defined in the term of ‘asset losses?
A: Assets refer to assets owned or controlled by an enterprise that are used for business management activities. Including monetary assets, non-monetary assets, and investments.

Q: What are the monetary assets?
A: Cash, bank deposits, accounts receivable and prepayments, notes receivable, various types of advances, and intercompany transactions.

Q: What are the non-monetary assets?
A: Inventory, fixed assets, intangible assets, construction in progress, productive biological assets.

Q: What are the types of investments?
A: Bond investment, equity investment.

Q: How are asset losses classified in corporate income tax management?
A: Asset losses are divided into actual asset losses and statutory asset losses.

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